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Over The Demand Cliff: Tesla Slashes North America Delivery Team By More Than Half

09:45 AM Feb 10, 2019

Following the latest round of job cuts that Tesla announced to start off 2019, the North America delivery division is seeing the most drastic impact. Reuters reports that the most recent jobs cuts reduced the company's North American delivery division by more than half of its current staff, citing two workers who lost their jobs. 150 employees out of a delivery team of about 230 were let go from the company's Las Vegas facility, according to the report. These employees were responsible for delivering Model 3s to eager US and Canadian buyers.
While Tesla declined to comment on the report, and while it has an undisclosed number of delivery staff at other locations, these cuts look to be a near certain sign from the company that, according to Reuters, it expects demand and deliveries in North America "to slow significantly heading into 2019." A large slowdown in demand or deliveries is attributed to the phasing out of the federal tax credit and the company blowing through its reservation backlog - a number that Tesla's "retiring" CFO recently characterized as "not relevant" on the company's Q4 conference call.
Just days ago, we wrote about Tesla's "demand hell" when the company slashed prices on some of its models for the second time in just 36 days. All versions of the Model 3 saw a price reduction of $1100, which lowered the starting price of the vehicle to $42,900. This followed a $2000 price cut on all Tesla vehicles that was announced in early January in order to try and offset the reduction in the United States federal tax credit. And only 4 months ago that Tesla claimed it was in "delivery logistics hell" which now looks to have ended as quickly as it started.
Back in September, social media had been plagued with reports of Tesla customers who had put money down on Model 3s, but had yet to find out when they would get their vehicles. Even the Tesla Motors Club forum played host to agitated customers who were looking for more information about when they would be taking delivery of their Tesla. People that were trying to contact the company often said that different departments at the company were feeding them different stories.
Musk acknowledged on September 12 that there was a "large increase in vehicle delivery volume" that was leading to "longer response times".
One can assume this massive cut to its North American delivery team means that the once "large increase" has now turned into a "large decrease".